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Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
As corn starts to exceed $5 in price and pricing can be locked in 2011 or even 2012 crops, have you checked your budgets for those years. If you have and are able to lock in your major input prices such as fertilizer and diesel, you should be looking at making $250 per acre or more on corn. This is some of the highest profits in the last 10 years. In order to accomplish this now by hedging your corn price, you must be able to also hedge your input prices.
I have listened to several marketing experts on ways to accomplish this and I think several of them have merit. Therefore, make sure to review your budgets for these years and at least consider locking in both revenue and costs numbers for 50% or more of your corn and bean and wheat crop. We do not get opportunities like this too often, so make sure to take advantage of this.
I would welcome comment on what steps our farmers have taken to lock in input prices.
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